MEXICO CITY—Macquarie Mexican REIT says it has completed the acquisition of a 50% interest in a portfolio of nine retail properties and additional land from Kimco Realty Corporation for around $113 million (Ps.1.47B).
An additional payment may be made to Kimco if certain occupancy and rental growth thresholds are met 18 months after closing. US dollar figures are based on an exchange rate of 13.00 Ps/USD.
“The transaction closed today is a great complement to our existing retail portfolio and represents an important opportunity to further create value for our investors,” said Jaime Lara, CEO of the Mexican REIT.
Grupo Frisa, a leading Mexican developer and property owner, will own the remaining 50% of the portfolio. Frisa held a blended 31% interest in the properties and has completed the acquisition of an additional blended 19% stake from Kimco at the same price as Macquarie Mexican. Frisa will continue to be responsible for the administration of the properties.
The properties total 2.1 million square feet of gross leasable area and the land available for future expansion totals 67,676 square meters (728.5 thousand square feet). Anchor tenants of the portfolio include retailers such as Wal-Mart, Chedraui and H.E.B., as well as Cinemex and Cinepolis theaters. The properties were 90.1% occupied as of February 28.
Macquarie Mexican estimates its interest in the portfolio will generate about $9.4 million of net operating income and approximately $4.4 million of funds from operations in 2014, on a full-year basis.
The acquisition of Macquarie Mexican’s 50% interest was funded with $44.4 million of senior debt drawn under a new facility led by GE Capital Real Estate Mexico and including HSBC Mexico, S.A., $22.2 million) drawn under a new facility with MetLife Mexico and about $66 million of available cash.
Following the closing, Macquarie Mexican’s portfolio consists of 259 industrial properties and 17 retail/office properties, totaling 28.5 million square feet across Mexico.
Macquarie Mexican REIT (MMREIT) (BMV:FIBRAMQ) is a real estate investment trust (fideicomiso de inversíon en bienes raices), or FIBRA, listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) targeting industrial, retail and office real estate opportunities in Mexico. Macquarie Group (Macquarie) is a global provider of banking, financial, advisory, investment and funds management services.